Targeted asset purchases and business dynamism

49 Pages Posted: 19 Jan 2023 Last revised: 24 Jun 2024

See all articles by Manfred Antoni

Manfred Antoni

Institute for Employment Research (IAB)

Talina Sondershaus

Lund University School of Economics and Management

Date Written: June 21, 2024

Abstract

Do targeted asset purchases alter business dynamism of SMEs and their plants? We find that plants linked to banks exposed to the first targeted asset purchases by the ECB are approximately 20% less likely to exit. The effect varies depending on the capitalization of banks and productivity of firms. We analyze entry dynamism by aggregating half of all German plants and observe lower entry rates in high exposed regions. Meanwhile, unemployment rates are lower. Our findings shed light on potential side effects of an ECB tool to prevent a resurgence of the European sovereign debt crisis during rising interest rates.

Keywords: SMEs, plants, market exits and entries, asset purchases, Securities Market Program (SMP), crisis instruments, Transmission Protection Instrument (TPI) JEL: E58, G21, G28, G33

JEL Classification: E58, G21, G28, G33

Suggested Citation

Antoni, Manfred and Sondershaus, Talina, Targeted asset purchases and business dynamism (June 21, 2024). Available at SSRN: https://ssrn.com/abstract=4329841 or http://dx.doi.org/10.2139/ssrn.4329841

Manfred Antoni

Institute for Employment Research (IAB) ( email )

Regensburger Str. 104
Nuremberg, 90478
Germany

Talina Sondershaus (Contact Author)

Lund University School of Economics and Management ( email )

Lund

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